The June jobs report is horrible, making its presentation as good news for the Obama Administration one of the most comical acts of media malpractice in recent history. They’re so eager to give Obama a “win” that they can’t be dragged kicking and screaming to the truth, but I’ll give it a try.
This is very simple: full-time jobs CRATERED in June. There’s no “robust growth” here. It’s a massive jump in the ongoing transformation of American into a part-time economy. It’s awful news, the sort of thing that would be making Americans howl for new leadership and new ideas, if it was reported accurately.
The U.S. economy lost 523,000 full-time jobs in June. This was offset by an enormous surge of 799,000 part-time jobs. That gives us what the media is bizarrely reporting as “300,000 jobs created.” Here, look, the guys at ZeroHedge put it into a nice little chart, which every reporter should be able to understand:
I’m old enough to remember when the press was very concerned about the exchange of career positions for “burger-flipper” jobs. For some reason, the bar for “job growth” was lowered abruptly in 2009. I wonder what might have happened to change the media’s minds, and make part-time work something to celebrate?
Yes, the headline-news U-3 unemployment rate fell to 6.1 percent – which would still be portrayed as a running disaster, the sign of an economy that isn’t performing anywhere near its potential, under any other President. Five-plus years into a “recovery” and 6.1 percent unemployment is presented as something to celebrate?
But at any rate, the more accurate U-6 metric of unemployment, which includes the long-term unemployed and under-employed, is still stuck at 12.1 percent. That’s because hundreds of thousands of people who want full-time jobs have to settle for part-time work. Another disturbing detail: not enough of those new part-time jobs are going to young people as entry-level positions.
And looking beyond even the U-6 number, the workforce declined by another 100,000 people who just gave up looking for work altogether. In fact, the number of people who gave up is larger than the number of previously unemployed people who found jobs in June. The overall labor-force participation rate didn’t change at all from May to June, leaving it stuck at the lowest level in four decades.
We’re still trapped in a stagnant economy; the best news is that it’s not slipping any further, and a few mildly encouraging future trends can be picked from today’s data. Today’s hot political spin is that we’ve had the best six-months stretch of job growth in years. That’s nice, but it matters a great deal what kind of jobs they are, and who is getting them. Moving in the “right direction” is good, but it matters how fast you’re moving, especially when all sorts of unpleasant events may soon put the fragile “recovery” to the test.
Of course, like every headline-grabbing jobs report, this is really just a preliminary assessment. Revisions will be made over the next two months, and they could make June look better… or they could make it worse. (The cynical observer might say these revisions inevitably make the numbers worse, revealing the initial report as a lot of wishful thinking, but in truth the revisions are positive sometimes; job creation for May was increased somewhat in the June report.)
Pending future revisions that reduce the number of full-time jobs lost, the highly-touted June 2014 unemployment report is really just more of the same old Obama economic formula: full-time jobs lost, part-time jobs up, workforce gets smaller.
Update: The Wall Street Journal, which should bloody well know better, falls for the spin machine and gives us nine paragraphs of happy juice before bringing up a few teeny tiny little details:
On the other hand, the number of people working part time because they can’t find full-time work rose and the share of population either not working or looking for work remains around 30-year highs. June’s labor-force participation rate was 62.8%, unchanged from the prior month.
“Today’s report indicated that labor market slack is diminishing, albeit slowly,” said Bricklin Dwyer, economist at BNP Paribas.
June’s job gains were broad-based, though lower-wage sectors continued to account for the bulk. The retail industry added over 40,000 new jobs while leisure and hospitality businesses added 39,000.
Higher-paying sectors continued to lag behind in the jobs recovery. Manufacturing added 16,000 new jobs and construction added 6,000.
This dichotomy has been reflected in muted wage gains last month. The average hourly wage for private-sector workers rose six cents to $24.45. That’s up just 2% from a year earlier, basically in line with consumer-price inflation.
Yay, we had robust growth and it was a great report and there are signs of labor-market strength! Oh, yeah, by the way, all the job growth came from low-wage part-time and temporary work, and wages are stagnant.